The United States and the United Kingdom, the two countries that have long dominated global affairs, are also always keen to portray themselves as the world’s two oldest continuous democracies. That claim gives off the impression that the main purpose of politics in those nations is to serve the people.

However, that reference to democracy, and hence to proper accountability structures, both personally and institutionally, increasingly looks like a mere cover-up. Criminal prosecutions, in particular, have been extremely scarce, despite the gravity and regularity of systemic malfeasance in the financial industry.

Something seems to be fundamentally off in the risk-reward ratio faced by financial elites, especially in the United States. For evidence, look no further than the absurd levels of today’s executive compensation and the constant clamoring for “free” markets. The latter apparently means freedom from having to accept any real consequences in case of malfeasance.

As a result, these financial and business elites are exposed to little downside, both personally and institutionally. If their schemes implode, they suffer few disadvantages. More often than not, they find themselves bailed out with government money.

In other words, their investment fortunes are made whole by an increase in the debt of the general public. That’s some kind of market rigor — never mind a complete violation of the rhetoric about the cathartic nature of free markets.

But didn’t non-U.S. and non-British institutions and individuals also commit such acts of gross malfeasance and outright crimes? Wasn’t the “Big Whale” trade that rattled JPMorgan so much put on by a French trader and actively supported by his Spanish supervisor? And weren’t German banks also actively involved in creating the mortgage mess?

Yes, they were, all of them. But such are the real-life effects of using leadership cultures as reference points. Not only will the dominant culture find plenty of aspiring individuals and institutions from other countries willing to take on similar risks in order to realize similar gains for themselves. These leadership cultures also set the rules of the road, what’s permitted and what not, what’s an acceptable risk and what is a bridge too far.

If the standard setters are inclined to tolerate too much risk-taking and impose too few effective internal controls, then their alluring powers can easily cause a corrosion of practices industry-wide and across borders. That is not to exculpate the “follower cultures,” whether it was banks in Germany, France, Spain, Ireland or Iceland. But it does speak to the special responsibilities that (ought to) come with being the leading industry cultures.

That is why it is so troubling when active accommodation, if not complicity, rules instead of regulators pursuing corrective or disciplinary actions against malfeasant operators. The few who tried to impose a course of tough action, such as Brooksley Born or Elizabeth Warren were invariably portrayed as unpatriotic, un-American, anti-market or all of the above.

The net effect of their diminution, not just by industry interests, but also fellow regulators such as then-Fed Chairman Alan Greenspan, created a permissive environment that let key beneficiaries of the system off the hook.

But a continuous slide of the U.S. and the UK into financialist democracies, intensified by a refusal to impose any sense of shame or restriction, does not serve the idea of democracy very well. Nor does it serve the interests of the people at large or the image of these two leadership cultures in the wider world.

What is especially astonishing is how little consideration is given to the effects of excessive risk-taking in the fields of finance and foreign policy. That may be considered a small price to pay when it comes to allowing elites having a free pass.

But if the Blairs and the Bushes, the Camerons and the Obamas are too busy impressing financial overlords, aka their key campaign contributors, then the great idea of democracy (“the people rule”) itself gets tarnished. Worse still, what is the purpose of holding elections, given the traditional complicity of the “opposing” political parties in not standing in the way of powerful business interests?

It is not just JPMorgan’s Jamie Dimon who has been avidly playing the part of Master of the Universe for a decade or so now. And it is not just his act that was always happily supported by a Fortune-riding media in their never-ending search for heroes. Before Dimon, it was the likes of Alan Greenspan, Larry Summers and Bob Rubin who played the part of mastermind. As did an American transplant, Bob Diamond, formerly of Barclays, in the UK.

What is astonishing to see — from the home mortgage debacle to the LIBOR scandal, the ill-advised Iraq invasion to the botched effort in Afghanistan — is that the chosen course of action is usually maximalist in nature. Such an all-in “strategy,” relying on rosy scenarios and little to no back up plans if things go wrong is dubious at best. The implied assertion is troubling. It suggests that real men and leaderstake action — not precautions.

Is this analysis exaggerated and/or culturally biased? To address those concerns, let me present my crown witness, in his own words. Regarding the LIBOR scandal and the “club” behind it, he spoke of London and New York suffering from “a cultural tendency to always be pushing the limits.” The source is one other than Lord Turner, chairman of the Financial Services Authority, the London-based financial regulator.

For a man with his past career stops, including as head of British industry, at McKinsey and Merrill Lynch, he has a refreshing sense of honesty and a remarkable willingness to name a spade a spade. His analytical depth and integrity make him a leading candidate to lead the Bank of England, replacing Mervyn King, the current all-too-complacent and clubbish office holder.

Lord Turner seems especially well equipped to take on that task. The misplaced sense of clubbiness has not served either the U.S. or the UK well. It has, in fact, turned the much-vaunted “special relationship” into an object of disrespect. In the foreign policy sphere, it’s led to war mongering. And in society at large, it has led to gross income inequality due to the unrestrained machinations of “high” finance.

Just why did this happen? The answer is simple. Finance is the one industry where U.S. and UK operators still excel (or, rather, used to excel). True, they did not offer superior solutions to their home countries’ real economies. But they surely spared no effort to make everybody else believe that they did.

The key point of this make-believe exercise was to wrap financial market operations in the flag of patriotism. By doing that, it was connected directly to the yearning for national superiority. With that connection established, the real purpose of the exercise could be taken care of — an unperturbed shakedown benefitting all high-level financial industry insiders, without democracy standing in the way. The main political parties and presidential campaigns were bought off with campaign contributions.

The underlying calculation was as cynical as it was correct: Wave the national flag — and you will have few people concerned about Americans (or Britons) making a big bundle in an industry where “we lead the world.”

The additional step, offering former politicians and officials the prospect of cushy jobs in the financial industry upon retirement from public office, makes virtually everybody within the relevant network very supportive. In that process, any suggestion of effective supervision and democratic accountability gets dumped.

That very same logic, of course, applies to the defense industry, the consulting industry, the lobbying industry or pretty much any other sector in which Washington “plays.” As the massive villas built in Washington, D.C.’s suburbs over the last decade or two attest to, nobody looks after the “pennies.” Questioning spending, absurdly high as it, is easily deemed to be unpatriotic, if not almost traitorous.

The suggestion is straightforward: Whether you are a financial market operator, regulator/supervisor, or legal/accounting support staff on Capitol Hill, we’re all part of the same team, aren’t we? We all want to get rich or invited to the right parties, don’t we? That millions of people meanwhile get driven out of their homes, lose their savings or income is just par for the course. As long as the economy is properly reflated, so that the stock markets keep on rising, why worry?

In order to get to the hog heaven of ever-rising personal wealth — accompanied by a level of taxation that in the United States is currently at historic lows — is it really asking too much to engage in a bit of collusion? Given the rewards, isn’t that a price worth paying?

Regrettably, that has been the choice of many. What else can one expect as long as the biggest penalty most managers in the financial industry are exposed to is to be fired?

Mind you, almost without exception, they get to keep the proceeds of their shenanigans. By then, however, the basic crime of extreme risk-taking has already been perpetrated onto society — and the gains collected privately. Where is the harm in that? You really wonder?

An industry that systematically privatizes the gains, while collectivizing the losses is not something to look up to. And yet, that is where the United States finds itself five years after the onset of the financial crisis. The number of prosecutions is dismally small.

That, it is said, is a consequence of the fact that financial crimes are very hard to prove. That may well be so, but U.S. prosecutors are otherwise not known to be timid in going after their targets.

To see what lengths they are generally prepared to go to, just consider the adamant pursuit of indicting Taliban helpers via the base in Guantanamo. Their indictments are often based on evidence trails that are practically impossible to establish.

Why, one wonders, was similar prosecutorial zeal not brought to bear on financial crime-sters at home? There, the deterrent effect would have been served effectively, in contrast to the slap-on-the-wrist tactics that are so widely practiced.

That has done nothing to enforce either democratic or personal accountability, two virtues that used to be held in very high regard in both the United States and United Kingdom before the recent bout of financialism.

One can even speculate that the loss in standards, self-discipline and prosecutorial rigor is a result of the slippage encountered by these countries in manufacturing and a slew of other industries. It is as if the inactions in the field of finance were guided by one notion: Can we really afford to disturb what is pretty much the only winning team we have left?

The rarified world of finance should not not just be about realizing the American Dream which, in the modern deformation, doesn’t just entail to get rich and retire at 48. The real “game” goes much deeper than that.

It’s about making sure the money one makes gets put not just into tax-advantaged accounts, but is preferably placed tax-free in offshore accounts. And all of that goes on with the eager help of the big accounting firms and private banks.

What’s wrong with that? Plenty. In that context, it is also breathtaking to consider the case of Mitt Romney. As with Al Gore, here is a man who from boyhood onward dreamed of becoming President.

With such a long-term plan in mind, and generally being considered a cautious and boringly circumspect man, it is mind-boggling to see how he still put the pedal to the metal when it came to benefiting from every aspect of tax-saving schemes.

That may be understandable for a very wealthy person who wants to remain a private citizen. But for somebody who always wanted to be the President of the United States, it is hard to understand.

Mitt Romney’s presumed sense of personal ethics is certainly not helped by the fact that he can likely argue that his accountants’ actions, which he condoned, meet the test of being legal. In politics, there is a crucial difference between something being legal and legitimate. One would think that Mormonism is keen on that distinction too.

Viewed in that light, his personal maximalism, cushioned in high-minded talk, is a perfect expression of the spirit of the times. The degree of overall risk-taking, from the foreign policy domain and the fields of Iraq to personal finance and the shores of Bermuda and the Bahamas, is stunning.

Sometimes, one wonders whether at least part of the constant haranguing about China in the U.S. debate doesn’t serve an ulterior purpose. It is as if the coming Asian onslaught in the global economy suggests that no proper restraints are in order on the actions of the financial and foreign policy elites.

Fortunately, there is a ray of hope. The LIBOR scandal, thankfully, is far more mechanical and therefore easier to track criminally than in the far more complex case of financial market products like derivatives.

In recent weeks, financial institutions have been told in no uncertain terms to make unprecedented settlements with regulators and consumers. A wave of winnable class-action lawsuits is upon a considerable number of financial institutions. Heads have rolled, at the top and in the ranks of the product managers.

Beyond LIBOR, there was a $7.5 billion settlement on swipe fees. Wells Fargo has been fined for prejudicial lending practices that discriminated against minorities. Banks have to address a $50 billion capital shortfall because of the requirements of Basel III.

This has the makings of fundamentally restructuring the way in which the finance business is conducted. Over a 30-year period, finance came to represent too great a share of the U.S. and UK economies. We got to a point where the purpose of the economy was to serve the world of finance and its vast armies of “key players.”

Now, hopefully, the tide is turning to having finance once again serve the economy. A fierce battle has gotten underway in both countries over how to make things right.

For now, the United Kingdom has a double advantage over the United States. It has gone further in restraining the power of banks and finance than the United States has been willing to do with the Dodd Frank Act. And thanks to the criminal machinations in Rupert Murdoch’s media empire, the country’s current political top gun, Prime Minister David Cameron, must feel rather chastised personally for his loose dealings with campaign contributors and “well-connected” friends.